iPhone users overwhelmingly reject app tracking, but ad industry needn’t despair

The day Apple launched iOS 14.5, 26 April, was the beginning of the end for automatic access for app owners to IDFA (ID for advertisers), which is used to track users across apps on the operating system and measure the performance of ads.

Since Apple announced plans last June to require apps to request the permission of users to track their behaviour, the question of how many would opt in has lingered.

The first numbers are now in, and the answer is stark. In US data from analytics firm Flurry, just one in every 25 iPhone users (4%) that had installed iOS 14.5 opted in to app tracking—a rate that would seem to render it near useless as a marketing tool.

The number is not a total shock; a recent survey found that even among marketers, a large majority favoured the new policy in the UK, called app-tracking transparency (ATT)—despite the change potentially making it harder for them to do their jobs.

But it is “at the lower end of already dire expectations”, Jamie MacEwan, senior media analyst at Enders Analysis, said, and “in contrast to the days following the GDPR roll out when publishers and ad tech vendors were boasting of pretty high consent rates”.

The fact that the standard message box gives the "opt out" option first means most users are likely to decline, he said—unlike most website cookie permission messages, which are designed in a way that encourages users to accept. 

A similar point was made by WPP chief executive Mark Read, speaking at Advertising Week Europe, earlier this week. “I think [willingness to share data] depends on the way, like referendums, the questions are posed,” Read said. “Do you want to be tracked, yes or no? The answer is probably going to be no. Are you willing to share information that's pretty anonymous? Probably yes.”

Despite the initial very low figure, the rate of opting in would be likely to rise in the coming weeks, Mark Syal, global chief product officer at Brainlabs, suggested. This is partly because only certain users have the iOS update, and they are not a representative group—but he also argued people would gradually consider the decision more carefully. 

“It’ll take a while before people realise they're giving up some data in return for a service,” Syal said. “It’ll be the first time people have thought about this in relation to their phone apps.” App owners, he said, “need to be more focused on persuading people it’s a good idea”.

Syal acknowledged that ATT would have a significant impact, predicting that somewhat fewer than 50% of users would ultimately opt in. But he argued that those who did would be disproportionately valuable to advertisers: “If you buy into a media brand well enough to know you’d give up the data in order to have that service provided to you for free, you’re probably very engaged with that particular brand or app.”

100% consent from users can be good for advertisers

Some of the consequences of Apple’s move would be good news for advertising, Belle Cartwright, director of data strategy at Essence, said. “It is going to have a massive impact on data sellers,” she said. “Those people that use utility apps to track people and then sell on that data, that's going to disappear, which is a really, really great thing for the industry, because it means that we rely on 100% consented users that are high-quality, consented users as well.”

Facebook has been the most high profile opponent of ATT, warning for the past year of the impact both on its own business and the huge number of small businesses that advertise on its platforms. Both Facebook and Instagram “have a real challenge on their hands because they're going to be hit from all fronts”, Cartwright said. 

The platforms have enjoyed “a heyday where they can kind of collect and see loads of declarative information from 100% authenticated users”, she said—but the changes to iOS, along with the coming end of third-party cookies, means that “what they can know and track about their own user base has diminished”. That is likely to result in a higher cost per acquisition on the platforms, making them less attractive to advertisers. 

The major challenge for advertisers brought about by ATT, Cartwright said, would be in measurement and reporting—meaning there will be more emphasis on “attention as a proxy”. 

“So if people are engaged with your ads—if you can see high viewability or high level of percentage view-through—that's going to be a proxy for whether someone's actually taken on board the information from your ad,” she said. 

Advertisers should approach the situation by “just being really open and challenging your preconceptions”, she added. “You may have thought that this is the one way to approach things, but every five to 10 years we go through the cycle of, there's an update.”

While an abrupt change like this is bound to hurt some businesses, MacEwan viewed it in the context of bigger shifts. “The market is always adapting, finding new ways to prove results,” he said. “This can drive more value to the premium end of the market.”

In terms of publishers, he added, it could lead more into adopting paywalls—“but the market was going in that direction anyway. The whole market’s expectation was set to more privacy, less tracking.”

For small brands, advertising in smaller apps on iOS may now start to look less attractive, meaning “a less risky option is to advertise in one of the walled-garden platforms”, Syal said. That could mean even market greater dominance for Google and Facebook. 

While that isn’t everyone’s idea of a good time, Syal argued that the situation could “cause everyone to rethink and innovate. Constraints sometimes can cause innovation, spurring new thoughts.”

And, as others have argued, it could force the industry to put more emphasis on “brand” over “performance” marketing, or in Syal’s words: “It may put more focus back on activities that drive rather than harvest sales.”

(This article first appeared on CampaignLive.co.uk)